How to Submit the FATCA Compliance Online

Suddenly on 27th April, 2017, one of my friends has got an SMS stating to submit FATCA self-declaration form to Central record keeping Agency (CRA) else account will be frozen. Naturally he became panicked as he did not know much about CRA, NPS etc. and being a government job holder he has NPS account by default. Then I told him how to submit the declaration for his NPS account.

I feel many of you have also received the same SMS and you have same question in your mind. Now, this article will tell you about the FATCA and how you can submit the FATCA compliance online right away.

What is FATCA:

Foreign Account Tax Compliance Act (FATCA) is an agreement between US and India for improving the international tax compliance. It is used to report the non US accounts of US citizens. India has entered into the agreement with US by which investors has to fill up the form with some details such as, citizenship, income etc. This act is only applicable for the US citizens whether he resides in US or not.

Where FATCA Compliance is Required?

According to the guidelines, the accounts which are opened on or after 1st July, 2014 or the accounts which have balance of more than $50,000 as on 30th June 2014 are applicable to comply with FATCA. Here the account means mutual fund folios, NPS account etc. Specifically, if you have mutual fund folio or NPS account opened after the above specified date you have to comply with the FATCA requirements. Recently NPS trust is sending mails and SMSs to consumers to comply the FATCA requirement.

How to submit the information for FATCA online?

To submit the FATCA information, you need to follow the steps below:

First, you select the KRA such as CAMS, KARVY etc. for the mutual fund holdings. If you have Birla Sunlife, ICICI Prudential, HDFC, DSP Blackrock, HSBC, IDFC, IIFL, Kotak, L&T, Mahindra, PPFAS, SBI, Shriram, Tata and Union mutual funds then you have to choose Cams.If you have Axis, Peerless, Mirae Asset etc. you have to choose Karvy. Here is the link of complete list of mutual funds which are under karvy.

Don’t forget to write on the envelope “Self-Certification – FATCA/CRS Declaration Form” on top of the envelope

Recently NSDL has started the online process to accept FATCA declaration online. They have a new directive saying that you need to complete the online process even if you have complied the process offline. The following steps are to be taken for FATCA declaration online.

OTP will come to your registered mobile number which needs to be verified.

Click on confirm.

A message box will display about the acknowledgment of the submission of FATCA declaration.

If your Birth Place, Citizenship, and Residence for the Tax Purposes is other than India or you are a US person you have to follow the offline process as stated above.

Effect of FATCA:

Generally, FATCA is not applicable for non-US persons. It is to comply with the US tax laws so that any person in investing outside US and obeying the US tax rules and regulations. In this case, US-based NRIs and the persons with dual citizenship are to be more careful when complying with the US tax rules.

Some of the mutual funds such as HDFC, Birla, ICICI etc. have stopped taking the fresh investments from US-based NRI and US citizens. The fresh investment is applicable for SIPs also. But the already invested money can be with the fund houses.

Even any new actions from those accounts have been blocked by AMCs (Asset Management Companies) and AMCs request them to redeem the fund. This is applicable for NRIs based in US and Canada. However, the NRIS who reside in other countries can invest in the mutual funds as before.